Legislative Assembly for the ACT: 2014 Week 6 Hansard (5 June) . . Page.. 1820..
This is a very important amendment for the territory. It will reduce the inequality in the payroll tax environment, promote competition and also improve the sustainability of the system. It will bring the territory into line with other jurisdictions and thus reduce red tape for those businesses that operate across state borders. I commend the Payroll Tax Amendment Bill 2014 to the Assembly.
Debate (on motion by Mr Smyth) adjourned to the next sitting.
Land Tax Amendment Bill 2014
Mr Barr, pursuant to notice, presented the bill, its explanatory statement and a Human Rights Act compatibility statement.
Title read by Clerk.
MR BARR (Molonglo—Deputy Chief Minister, Treasurer, Minister for Economic Development, Minister for Sport and Recreation, Minister for Tourism and Events and Minister for Community Services) (10.33): I move:
That this bill be agreed to in principle.
As announced in the 2014-15 budget, the government will continue its commitment to taxation reform. The Land Tax Amendment Bill 2014 is another step the government is taking to provide a fairer, simpler and more efficient taxation system for the people of Canberra. The bill I present to the Assembly today removes the issue of inequity that currently exists in the calculation of land tax. Generally, land tax applies to all residential properties that are rented and properties owned by a corporation or trustee. Land tax in the territory is currently calculated based on the average unimproved value of the property and a marginal rate. Multi-unit properties have generally had a lower average unimproved value than standard residential properties, thus a lower marginal rating factor applies. This approach has resulted in a disproportionately low amount of land tax contributions coming from multi-unit property owners.
In the current fiscal year approximately 35 and a half thousand properties are subject to land tax in the territory—44 per cent of these properties are standard residential houses with the remaining 66 per cent being properties that are either units or townhouses. However, the standard residential houses contribute 78 per cent of land tax revenue. So 44 per cent of properties are contributing 78 per cent of the land tax revenue; the remaining 22 per cent is coming from multi-unit and townhouse properties.
To create a more even distribution of land tax, this bill imposes a fixed charge in the calculation of land tax. A fixed charge will be determined at $900, and it is estimated that this fixed charge will make up roughly 40 per cent of revenue raised from land tax once the amendments have been implemented. This measure has synergies with the general rates framework where 40 per cent of general rates revenue is also generated through a fixed charge.
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